Review By on January 9, 2015
On one hand, we witnessed withdrawal of main board IPO of NCML Ind that got just 45% response till second last day of extended period with lower price band and on the other, NCD offer from IFCI getting just 14% response in first full week of subscription indicating diminishing preference for IPO post debacle of Monte Carlo IPO post listing. Yet, we continue to witness entry of SME IPOs. Details of the same are as under:
Raghuvansh Agrofarms Ltd (RAL): The Company claims to be a unique initiative in the agri-dairy products line. By the way of promoting involvement and participation of people, it strives to take the mainstay of Indian economy, agriculture and allied sectors, to the hands that nurture it. RAL owns cultivable lands and cattle stock, have consultancy liaisons with researchers, and possess vast experience in Indian business environment. The company offer financial, technical, strategic assistance in the agricultural and dairy business areas to establish profitable enterprises. With innovative initiatives like Microfinance and Kisan Helpline, it is helping many others realize the potential.
Now to part finance its investment in subsidiary companies and construct Bio-Gas plant for power generation, the company is coming out with a maiden IPO of 3600000 equity share of Rs. 10 each at a fixed price of Rs. 11 per share to mobilize Rs. 3.96 crore. Post this IPO its current equity of Rs. 8.32 will rise to Rs. 11.92 crore. Issue is lead managed by Sobhagya Capital Options Ltd and Skyline Finance Services Pvt Ltd is the registrar to the issue. Issue opened for subscription on 09.01.15 and will close on 13.01.15. Post allotment, it will be listed on BSE SME. Minimum application is to be made for 10000 shares and in multiples thereon, thereafter. The company issued equity at a price of Rs. 100 to Rs. 500 during 2007 - 2011 and issued bonus shares in the ratio of 3 for 1 in 2013. Thereafter it again raised equity from promoters at a price of Rs. 20 per share that has helped it to get NAV of Rs. 20 plus.
On performance front, the company has posted and average EPS of Rs. 0.37 for past three fiscals. For H1 of current fiscal it has earned net profit of Rs. 0.04 crore on a turnover of Rs. 0.67 crore translating into an annualized EPS of Rs. 0.01 on existing equity that will slide further on enhanced equity post issue and thus at asking price of the issue it will be above 110 P/E. Lead manager has poor track record for its past mandates.
Remark: Considering the entry barrier and poor preference from broking community, this high P/E IPO is not worth.
Review By on January 9, 2015
Dilip Davda is a veteran financial journalist associated with the Indian stock market since 1978. He has been contributing to print and electronic media on capital markets, insurance, and finance since 1985.
He is widely recognized for reviewing public issues and non-convertible debentures (NCDs) in the primary market. Drawing on over three decades of market experience and close interaction with merchant bankers, his reviews focus on detailed fundamental and financial analysis of companies, with a special emphasis on SME public issues.
Dilip Davda
SEBI Registered Research Analyst – Mumbai
Registration No.: INH000003127 (Perpetual)
Email: dilip_davda@rediffmail.com
Disclaimer: The information provided herein is solely for educational and informational purposes and does not constitute an offer, solicitation, or recommendation to buy or sell any securities. Readers are advised to consult a qualified financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. The author does not intend to invest in the securities discussed.
The initial public offer (IPO) of Raghuvansh Agrofarms Ltd. offers an early investment opportunity in Raghuvansh Agrofarms Ltd.. A stock market investor can buy Raghuvansh Agrofarms IPO shares by applying in IPO before Raghuvansh Agrofarms Ltd. shares get listed at the stock exchanges. An investor could invest in Raghuvansh Agrofarms IPO for short term listing gain or a long term.
Read the Raghuvansh Agrofarms IPO recommendations by the leading analyst and leading stock brokers.
Raghuvansh Agrofarms IPO offers an opportunity to buy IPO shares before they get listed at the stock exchanges. Read the Raghuvansh Agrofarms IPO Notes, Analysis and Recommendations by leading stock brokerage firms and experts mentioned in the above answer to "How is Raghuvansh Agrofarms IPO?"
Our recommendation for Raghuvansh Agrofarms IPO is to avoid.
As per the analysis by our lead analyst Mr. Dilip Davda, we suggest you to avoid the Raghuvansh Agrofarms IPO.
The Raghuvansh Agrofarms IPO allotment status will be available on or around [.]. The allotted shares will be credited in demat account by [.]. Visit Raghuvansh Agrofarms IPO allotment status to check.
